Collateral registry Sidelines women’s firms

The World Bank has observed that businesses owned by women are not benefiting much from collateral registry with a paltry K75 million worth of loans accessed by women out of K242 billion facilitated by the registry.

This means that 0.03 percent of the loans have been obtained by women small-scale entrepreneurs.

A cross-section of women entrepreneurs following a presentationduring the workshop yesterday

The collateral registry, launched in November 2015 by the World Bank Group, is an online public database that allows financial institutions to register security interests in movable property that includes motor vehicles, livestock, crops, maize mill, equipment and accounts receivable and mitigate the risk of customers.

Speaking at a day-long workshop on collateral registry in Blantyre yesterday, International Finance Corporation (IFC)senior operations officer for finance and markets global practice Bartol Letica said there is need to introduce the opportunity presented by movable-based lending and collateral registry.

He said: “Women’s entrepreneurship, which has been recognised as an important untapped source of economic growth is on the rise globally and women’s share of the labour force has also increased in recent years, but despite these positive trends, women’s economic activities are not equally distributed.”

Letica said women entrepreneurs, apart from having difficulties to access to finance, are also constrained by traditional treatment of ownership of assets in Malawi and communication gaps that exist between financial institutions and women entrepreneurs.

As in many other countries, financial institutions in the country traditionally require fixed assets such as land or buildings as collateral for loans.

In his remarks, Small and Medium Enterprises and Cooperatives department director in the Ministry of Industry, Trade and Tourism, Wiskes Nkombezi, said the ministry plans to engage women entrepreneurs by imparting skills to them that would present opportunities that the collateral registry presents.

“Government plans to continue engaging all stakeholders to ensure that financing to small and medium enterprises using innovative means is facilitated and that the cost of borrowing is reduced,” he said.

Registrar General Chapusa Phiri noted that the interest shown by women-owned businesses as demonstrated by the strong attendance of the workshop is an indication that there is significant demand for movable assets-based lending. n